By Susan Cornwell
WASHINGTON (Reuters) - U.S. President Donald Trump's choice to lead an important health agency said on Thursday that the way pharmaceutical companies classify products as generic or branded needs to be reviewed in order to help hold down government spending, as she cited Mylan (NASDAQ:MYL) NV's EpiPen emergency allergy treatment.
Seema Verma, Trump's nominee to lead the Centers for Medicare and Medicaid Services (CMS), did not answer questions about whether the U.S. government should negotiate with pharmaceutical companies over drug prices.
"I think what happened with ... the EpiPen issue is very disturbing," Verma said at her confirmation hearing before the Senate Finance Committee. "The idea that perhaps Medicaid programs, which are struggling to pay for those programs, that they could have potentially received rebates is disturbing to me."
Mylan has been criticized for listing EpiPen with Medicaid as a generic product even though it listed it with the Food and Drug Administration as a branded product. The classification led to Mylan's paying significantly smaller rebates to the Medicaid healthcare program for the poor than if EpiPen were classified as branded.
"I would like to review the processes in place there, in terms of the classifications, in terms of brand and generic, to ensure that type of thing doesn't happen again," Verma said.
CMS said last year that it had "expressly advised" Mylan that the drugmaker had improperly classified EpiPen.
Mylan said last month that U.S. antitrust authorities had launched an investigation into EpiPen. The company said suggestions it took any inappropriate or unlawful actions to prevent generic competition was "without merit."
Mylan has also come under fire for raising the price of a two-pack of EpiPens to $600 last summer from $100 in 2008. Mylan began selling a generic version of EpiPen for $300 per two-pack in December.
Verma also said she would produce records of communication between the agency and Mylan, when questioned by Republican Senator Chuck Grassley. A statement from Grassley's office said Mylan had overcharged states and taxpayers by "potentially hundreds of millions of dollars."
Democrats were not pleased with Verma's sidestepping a question from Senator Debbie Stabenow about whether she agreed with Trump that the government should negotiate with drug companies over prices of drugs covered by the Medicare healthcare program for the elderly and disabled.
"I don't think that's a simple yes or no answer," Verma said. "The goal is to make sure that we're getting affordable prices for our seniors."